John Phipps: China is Losing Farms and Farmers at an Astonishing Rate
U.S. Farm Report 07/29/23 - Customer Support
A few months ago, someone sent me a letter asking about China and farm machinery. If that sounds vague, it is. I have puzzled over my cryptic note made at the time and searched my mail repeatedly. If you asked in the past year or so about some aspect of Chinese farm machinery, send me a name and address. I did find some interesting stuff about this topic.
The amazing underlying fact is how rapidly the number of Chinese farmers is decreasing.
Rural population is a rough guide to farmer numbers and it is has dropped from about 800 million at the turn of the century to 240 million now. That’s about 3.5% per year, and it’s accelerating. In comparison, during the ag mechanization of the U.S., our sharpest drop in farm numbers was about 2% per year. China has about 335 million acres of farmland of which about 240 are in grain production. The math indicates the impact on farm machinery use.
With an average farm of a little over an acre, the obvious question is where would you park a combine? While there are millions of farms this small, they usually farm in groups big enough to use tractors and harvesting equipment. In fact, China exports more farm machinery (in dollars) than the US, mostly tractors and livestock equipment to places like Viet Nam and South America. It imports some machinery, but not much.
The rapid reduction in farmer numbers is a result of government efforts to 1) raise money, since the government owns the land and 2) achieve modest economies of scale for added productivity and 3) add about 5% more tillable acres by removing farmhouses. This movement of people off farms to urban areas has also been driven by the need for labor during their rapid industrial growth.
Despite government efforts China is currently losing about 2 million prime acres per year to development and erosion. It is hard to envision Chinese farmers competing in the market for US-sized machinery, but they will likely be formidable competitors and buyers for smaller equipment in places like India and Africa.
Still the rapid movement of people off their farms and their plummeting birthrate suggests China may have larger farms and equipment within a decade or so.
